The Supreme Court has made a significant decision in the Adani Hindenburg case, ruling against the transfer of the investigation from the Securities and Exchange Board of India (SEBI) to a Special Investigation Team (SIT). On December 3, the apex court dismissed the plea to shift the probe and stood by SEBI's handling of the case.

Rejecting the reliance on a third-party report, the court asserted its confidence in SEBI's capabilities. It mandated the Government of India and SEBI to thoroughly examine any potential breaches of the law highlighted in the Hindenburg report regarding short selling. The judgment emphasized taking legal action as per the law, entrusting SEBI with the responsibility.

The court highlighted SEBI's progress, noting that investigations into 20 out of 22 matters have been concluded. Following the Solicitor General's assurance, the court directed SEBI to finalize investigations into the remaining two cases within three months.

Background of the Case

A bench led by Chief Justice D Y Chandrachud, accompanied by Justices J B Pardiwala and Manoj Misra, delivered the judgment today at 10:30 am, addressing four petitions.

These petitions, reserved for judgment since November 24, 2023, alleged that the Adani Group, perceived to be close to the Modi government, artificially inflated its share prices. Following the Hindenburg Research report, the value of various group entities' shares plummeted significantly.

Earlier, in March 2023, the Supreme Court directed SEBI to probe potential violations of securities law by the Adani Group in response to the Hindenburg report. Additionally, the court established an expert committee, led by former top court judge Justice AM Sapre, comprising six members to oversee the investigation.

The recent ruling maintains SEBI's role in the investigation, upholding its authority in scrutinizing the alleged violations highlighted in the Adani Hindenburg case.

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